The Government of President Ivan Duque is nearing its final stretch, and a few months after leaving the Casa de Nariño, the president is touring New York City (United States). In it, Duque has been holding meetings with investors and directors of different organizations, and yesterday he took advantage of his time on Wall Street to launch the Green Taxonomy, a guide on which the Government has been working in order to finance sustainable growth in the future.
The Green Taxonomy has been defined by the Government asa robust and standardized framework for classifying sustainable economic activities and financial assets”. With this classification system, it is sought to facilitate the channeling of resources towards green investments and expenses, thus increasing the country’s competitiveness, and focusing on current challenges, such as climate change.
The President of the Republic emphasized that “the most difficult crisis of our time is precisely the climate crisis,” and described the launch of the document before the NYSE. “Right now we are the fourth country in the world to have a Green Taxonomy, which is a kind of code or DNA through which we are going to catalog all the definitions of public policies and they can be demonstrated in a carbon market.
To date we have managed to issue two green bonds in the world marketbut thanks to the Green Taxonomy, investors will know with certainty what policies are being implemented in Colombia and how we are protecting ecosystems and combating deforestation, and protecting species”, said the President.
This roadmap is added to other actions of sustainable financing that Colombia has promoted, such as the sovereign green bond issues that were carried out last year.
The country auctioned a total of $1.49 million in Green Treasury Bonds (TES) to 2031. The first issue was for $750,000 million, and the second auction was for $650,000 million.
The Minister of Finance, José Manuel Restrepo, was one of President Duque’s companions at the launch of the Green Taxonomy at the New York Stock Exchange, and highlighted how Colombia continues to position itself as a leader in terms of financing for mitigation and adaptation to the effects of climate change.
“We published the first version of the Green Taxonomy to allocate resources to projects, activities, initiatives and assets that contribute to meeting our environmental objectives and joins other initiatives such as green bonds, a market that will be given greater dynamism, as well as financial protection strategies against disaster riskRestrepo said.
What is Taxonomy?
In the middle of last year, the Inter-American Development Bank (BIC) highlighted how thematic bonds (social, environmental and governance investments, green, blue, gender, among others) have become successful investments in Latin America, as they address issues related to development and are attractive to investors.
Thus, the Green Taxonomy strategy establishes a classification system for economic activities and assets that have substantial contributions to the achievement of environmental objectives, and that respond to the commitments, strategies and policies outlined by the Colombian government in environmental matters. Thus, what is a green investment for the country is defined.
The importance of the Green Taxonomy lies in the fact that it allows a homologation of criteria for both private and public investments with an environmental focus, and can be used by bond issuers, investors, financial institutions and public entities.
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In turn, Colombia benefits from this system because it allows more resources to be mobilized to favor projects that mitigate climate change and protect biodiversity. The instrument not only helps to identify and assess these activities and assets, but also allows so-called green financial instruments to be differentiated from other instruments and supports the monitoring and tracking of investments.